Mixed bag for live exports year-on-year

20 October 2017

Cattle

Feeder and slaughter cattle exports lifted above 77,000 head in September, bringing shipments for the calendar year-to-September to 565,000 head – down 25% compared with the same period last year. Australian cattle exports for the year-to-date have been affected by tight domestic supply, high cattle prices and a number of ongoing in-market challenges.

Shipments of feeder and slaughter cattle to Indonesia in September totalled 59,000 head – the second largest month for the calendar year-to-date. A year-on-year comparison offers little insight, as no shipments to Indonesia in September of last year (the result of the introduction of the breeder policy rule causing disruption to the live cattle export trade) were recorded. The Indonesian government’s 5:1 (five feeder cattle imports to one breeder) policy is scheduled for the first audit in December 2018.

The presence of cheaper Indian buffalo meat in wet markets across Indonesia - combined with high Australian cattle prices - will likely limit cattle exports until the end of the year.

Feeder and slaughter cattle exports to Vietnam in September were back 15% year-on-year, to 13,000 head. Feedlots in Vietnam remain relatively well-stocked from feeder cattle exports that occurred during July and August, resulting in no exports of feeder cattle to Vietnam during September. In addition, lower beef consumption at this time of year in Vietnam has further underpinned the lack of demand to restock.

High Australian cattle prices have been a limiting factor for cattle exports to Vietnam for the calendar year-to-date. However, as the higher consumption season approaches, supported by the Vietnamese New Year in February, there is the prospect of shipments increasing in the months ahead. In MLA’s latest industry projections, cattle exports were revised slightly higher to an estimated 800,000 head, underpinned by the prospect of greater demand from Vietnamese importers.

For the calendar year-to-September, cattle exports to Malaysia were just above 10,600 head, a decline of 60% year-on-year. Cheaper cattle from Thailand continue to support demand in Malaysia, as does buffalo product from Australia – with a shipment of 849 head exported in September.

Year-to-September feeder and slaughter cattle exports to Israel totalled 20,800 head – down 66% compared with the same period last year. Import demand in Israel has been supported by lower priced cattle from Portugal and France.

Breeder cattle exports in September were just above 1,000 head, a decline of 89% year-on-year. For the calendar year-to-date, breeder shipments are down 39%, at 62,500 head.

Shipments of breeder cattle to China for the year-to-September totalled 43,600 head, down 43% year-on-year - there were no recorded shipments of breeder cattle to China in September.

The primary reason for the reduction in breeder exports to China is weak demand in the dairy industry, but pedigree policy changes in the beef and dairy sector are also having an impact. The pedigree policy changes dictate the percent of breeder consignments that must include category 1 heifers. However, the Australian market absorbs most of these full pedigree heifers.

Sheep

Sheep exports in September totalled 140,500 head, an increase of 33% year-on-year.

Exports to Kuwait in September were just under 49,000 head – up 78% year-on-year. Shipments to Qatar totalled 70,000 head, more than double the number of sheep exported in the same period last year.

Exports to Kuwait and Qatar for the calendar year-to-date have accounted for 33% and 36% of total trade, respectively.

Demand for sheepmeat in the Middle East remains strong, the result of increasing disposable incomes, urbanisation, a growing expat population and a developing tourism industry. Demand in Qatar is also being driven by preparations for the 2022 soccer World Cup; significant numbers of expatriate labourers from the sub-continent are working on large construction projects across the country which has seen growing demand for imported product.

Goats

Goat exports were 250 head in September, bringing shipments for the calendar year-to-September to 7,685 head – down 83% compared with the same period last year.

The decline was driven by a combination of the sustained increase in Australian prices over the past two years and importers seeking alternative supplies.

While Malaysia remains the largest recipient of Australia goats, Malaysian importers have increasingly looked to goat suppliers in Myanmar and Thailand. Exports to Malaysia for the calendar year-to-date were back 88%, at 4,300 head.

With the recent decline in Australian goat prices, there may be more interest from importers, but this will be influenced by the availability from alternative sources.